Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by Tesco (PGP 51)

PLANNING GREEN PAPER

1. Tesco is the UK's largest retailer and
one of the largest users of the planning system. Last year we
submitted several hundred planning applications, ranging from
superstores to signage, and have dealt with every local planning
authority in England. Our professional planners work daily with
the planning system and are familiar with its strengths and weaknesses.

2. Tesco is also a major contributor to
UK regeneration (physical, social and economic), which is a key
driver of the UK economy. We create 10,000 jobs every year. 90
per cent of our developments are on brownfield sites. We are,
therefore, well qualified to comment on the effectiveness of the
planning system.

3. Tesco is grateful for the opportunity
to respond to the questions raised by the Select Committee. We
have separately responded to the Government's Planning Green Paper
and daughter documents, and a copy of our response can be found
on the Tesco web site www.tesco.com/corporateinfo

4. Tesco supports the plan-led system. Plans
can set out a vision for, and describe the intended use of, land
in an area.

5. However, the current plan-led system
has several weaknesses. These contribute to a planning system
that is slow, bureaucratic and inflexible. This frustrates and
delays development, particularly commercial development.

6. Development plan coverage across England
is still not complete. Those plans that have been adopted are
becoming increasingly out-of-date, with little chance of immediate
review.

7. The failure of the plan-led system stems
from the time taken by local authorities to get to grips with
the approach required to draft their development plans. Many plans
were too detailed and therefore generated too many objections,
resulting in enormous and time-consuming local plan inquiries.

8. We believe that most local planning authorities
do not devote sufficient resources to the development plan process
to enable it to operate efficiently and quickly. There are delays
at every stage at the process, for example in the consideration
of objections, and in the publication of sensible pre-inquiry
modifications to overcome objections.

9. Delay is also caused by the multi-layered
development plan system. Structure plans are not progressed until
regional policy is reviewed and local plans cannot progress until
structure plans are approved. Objections by local planning authorities,
to each other's plans, also causes delays. This is less common
where Unitary Development Plans are prepared.

10. The Government's proposals in the Green
Paper for Local Development Frameworks (LDFs) should, in principle,
address many of the issues around local plans. This is providing
LDFs are simple and straightforward, setting national and regional
policy in a local context, the other tiers of planning function
well and the correct resources are made available. We have some
doubts that these provisos will be met (see other comments below).

11. We have a number of specific comments
on the Government's proposals for Local Development Frameworks:

(a) We support the creation of a streamlined
planning system based on national, regional and local policy.
We believe that, once a regional structure is fully functioning,
any attempt to allow counties to keep their planning powers would
create unacceptable layers of bureaucracy.

(b) We are concerned that the role of community
strategies, and their relationship to the LDF, is unclear. We
believe that there is a risk of unnecessary and confusing multiple
layers of community consultation. We welcome a clear statement
by the Government of the intended linkage between the plans and
description as to how the system will work in practice.

(c) Action Plans are important for significant
major developments and are useful tools for enabling a swift regeneration
of urban areas. However, we are concerned that the Government's
proposals could lead to a proliferation of action plans. They
should be specific tools, used sparingly.

(d) The most important requirement for a
plan-led system is that relevant plans should exist. It is essential
that handling targets be applied to LDFs. If this is not done,
scarce resources within authorities will be diverted away from
policy formulation into achieving the public targets. Guidelines
are not enough.

(e) We welcome the proposal that LDFs should
be regularly updated. It is crucial in a plan-led system that
these documents reflect all the latest changes, both in national
policy and in local situation. However, if review periods are
too short, there is a risk that there will be a constant state
of flux. If confusion and inefficiency is to be avoided, a careful
balance needs to be struck in setting review cycles for community
strategies, action plans and LDFs.

(f) The new LDF framework will not be effective
if there is inadequate engagement with the community. Tesco is
committed to community involvement. Our business depends crucially
upon listening to, and delivering the needs of, our customers.
Engaging communities, most of whom may be at best ambivalent to
the issues of local planning, is by its nature difficult. If we
are to have an inclusive process and planning decisions that are
right for all, the proposed Statement of Community Involvement
must capture the views of everyone in the community, not just
special interest groups who may be fundamentally opposed to development.

(g) Local Development Frameworks and Action
Plans are to be statutory documents and should therefore be fully
tested through a local plan inquiry allowing any unintended impacts
to be identified. We also support the view that the Inspector's
recommendations should be binding on the local planning authority.

THE ROLEOF REGIONAL
PLANNING BODIES

12. The purpose of regional policy should
be to set a strategic development framework for the region. It
should be well integrated with other policies, both national and
regional and should create a clear strategy within which the LDFs
can work. We believe that the regions involve all interested parties
in the region: the community, public bodies, business and the
voluntary sector.

13. Regional structures are currently complex,
confusing and inconsistent across regions. We are not convinced
at this stage that the arrangements proposed at the regional level
can deliver effective strategic planning. We believe the ideal
Regional Planning Board should be:

 Development-minded;

 Focussed on strategic planning;

 Accountable;

 Representative; and

 Producing plans that are well tested
and co-ordinated with all other regional plans especially the
economic and transport plans.

14. The current regional planning groups
suffer from the following problems, which we fear will carry over
into the new structure:

 Local and county authorities and
special interest groups dominate the groups. Business and the
wider community are not properly represented, despite the Government's
best intentions.

 There is no right of representation
at regional planning EIPs. We believe that Regional policy should
be tested openly at a public inquiry, with all parties making
representations having the right to attend.

 There is not a consistent institutional
arrangement at the regional level, which is also accountable,
to facilitate strategic planningstrategic planning must
not stand-alone.

 There are inadequate resources at
the regional level to deliver effective RSSs.

THE PROCEDURESFOR SCRUTINISING
MAJOR DEVELOPMENT
PROJECTS.

15. The planning system should have an effective
mechanism for assessing and determining applications for major
infrastructure development. A significant number of major schemes
need to be brought forward to develop and renew the country's
infrastructure and these should not be delayed by unnecessarily
protracted processes.

16. We agree that retail schemes should
not come within the definition of major infrastructure. We are,
however, concerned about the Secretary of State's ability to call-in
proposals as major infrastructure. There is a risk that this discretion
may lead to an unhelpful expansion in the classes of schemes caught
within the definition.

17. We feel that there should be the right
to make representations on projects affecting our properties at
all stages of the process. We would like a consultation stage
before the proposals are considered by Parliament. We believe
this would be of great assistance to Parliament.

BUSINESS PLANNING
ZONES

28. Business zones are unlikely to affect
Tesco's own developments. On the face of it, it seems a complex
structure to create for a few zones.

29. Planning delays, which hinder the type
of development proposed, could be practically eliminated by a
new LDF and Action Plan framework, effective development control
and efficient handling targets.

30. If the Secretary of State is involved,
his department must be proactive in dealing with all commercial
applications. A review of PPG 4 Industrial and Commercial development
and Small Firms, published in 1992, is overdue and should provide
up-to-date policy on leading edge commercial development.

PROPOSED CHANGESTO PLANNING
OBLIGATIONS

31. While the Green Paper sets out a number
of options for reforming and improving the planning obligations
system, the Government proposes introducing a system of tariffs
for local authorities to set for different types of development.
We strongly oppose the proposed development tariff. It is a tax.
It is anti-development and it will distort and impede development.

32. In some areas, any significant increase
in the cost of obligations may result in no development. Many
of our developments are now in areas of deprivation and provide
significant benefits to the communities they serve, including
regeneration, access to foodstores and new employment. Often these
schemes are marginal in terms of financial returns. The burden
for affordable housing will fall unfairly on a few industries
dependant on land for their development. There is no justification
for requiring retail and housing developers to pay the cost of
affordable housing, whilst other sectors such as banks and utilities
pay little or nothing. General taxation is a far more equitable
tool.

33. It will also be an administrative burden.
It will be difficult for local authorities to know at what level
to set tariffs. Local authorities will struggle to cope with the
complex matrix of scales of development, development types, company
types, and exclusions which are all required to satisfy the affordable
housing need. The result will be market distortions and restricted
development.

REFORMINGTHE
CURRENT PLANNING
OBLIGATION SYSTEM

34. We accept that planning obligations
should be used in a positive way to help achieve planning objectives,
in particular regeneration. Obligations can provide a means of
reconciling the aims and interests of developers with the need
to meet the costs imposed as a result of development.

35. We understand the Government's concern
about the lack of transparency and predictability within the current
system of planning obligations.

36. We believe that the underlying principle
behind the current rules, that obligations should be necessary
to the development, is the correct one. This gives a clear and
readily understood basis for agreement, and will mean a swifter
resolution for all concerned.

37. We feel that the current system could
be enhanced by the following relatively simple measures:

(i) Include the scope of planning gain from
any particular development within a criteria based policy of the
LDF. This would set predictable limits on the scope of obligations,
and provide a start point for negotiations.

(ii) Require applicants to include heads
of terms as part of an application. This would make the obligations
transparent, and in the public domain. It would be possible to
model standard agreements, to further speed up the process.

(iii) Require full disclosure of the issue
at the planning committee

(iv) Place Section 106 agreements on the
planning register together with the decision letter.

38. These proposals would achieve complete
transparency and could be speedily implemented. They would, in
combination with the continued application of the principles of
Circular 1/97, achieve the Government's objectives.

COMPULSORY PURCHASE

39. Tesco wish to see a compulsory purchase
regime that is clear, consistent and quick. We broadly welcome
the reforms set out in the Green Paper. Our view is that the weight
of the proposals meets the simplicity and fairness objectives
and should lead to a faster conclusion of the process.

40. We consider that there should be a clear
legislative basis for compulsory purchase

41. and welcome the codification, consolidation
and simplification of the current complex matrix of legislation
and case law. It should make the system faster, more consistent,
clearer and increase the potential for successful delivery.

42. We also welcome the proposal to extend
compulsory purchase for general regeneration purposes, as it should
improve the regeneration prospects of urban areas.

43. Whilst we welcome the proposals to improve
the system with these three objectives in mind, we outline below
a few comments and suggestions.

(a) We share the Secretary of State's concern
about how long he takes to make a decision to confirm an order.
He could take a lead on this by agreeing that all orders should
be confirmed within a backstop time. We suggest that 16 weeks
is acceptable.

(b) We welcome the statement that the concept
of open market value should be retained for assessing compensation.
We also believe that the "no scheme world" principle
is the right one for the purposes of valuation.

(c) We welcome a payment of additional loss
in recognition of the physical and psychological upheaval of compulsory
purchase, provided this is a reasonable level. To keep the system
simple we suggest a uniform payment is made. We suggest an additional
10 per cent of land cost might be appropriate.

(d) We are concerned that the change in disturbance
to be paid for "all actual costs and losses", could
give rise to unfair and unreasonable claims. This will create
scope for dispute, complicating and slowing down the process.
We wish the Law Commission to include a requirement obliging claimants
to mitigate against their loss.

44. We share the Government's aim of an
effective reform of the planning system, and welcome the start
of this process. We are entirely at one with the Secretary of
State for Transport, Local Government and the Regions when he
says in his forward "we need a better, simpler, faster and
more accessible system that serves business and the community"

45. However, we are concerned that in practice
the Government's objectives will not be achieved, especially for
businesses who face the consequences of the failings of the existing
system.

Planning Policy Guidance

46. One of the key foundations of the planning
system is national planning policy

guidance (PPG). We welcome the proposed review of
PPGs, especially PPG6 Town Centres and Retail Developments. PPGs
should continue to set out the Government's positive attitude
and policies towards industrial and commercial development. We
are concerned that ad hoc clarification has led to unnecessary
delays and inconsistent planning. Full and open consultation must
take place when a PPG undergoes review.

Regional Planning

47. While supporting the principle of regional
planning policy we consider that regional structures are currently
complex, confusing and inconsistent. Regional plan making is remote
and fails to engage with businesses and communities. The proposals
in the Green Paper do little to address these criticisms. We are
also concerned that redirecting planning functions from structure
plans to regional plans could, in the interim, cause transitional
delays which would delay the preparation of Local Development
Frameworks. More thought needs to be given as to the best solution.

Local Development Frameworks

48. A simple and consistent national and
regional framework of policies would set the context for strong
and consistent local plan making. To make the system work plans
should be regularly updated and the process must include engaging
the local community. We consider that an LDF can be created in
18 months. At present, individuals and businesses, have to wait
for plans to pass slowly through a complex and lengthy process.
Timely review will enable all parties to play a more active and
productive part.

49. To ensure that Councils give LDFs due
attention and resource them properly, There should be strictly
imposed handling targets. If this happens local communities and
businesses will benefit. Action Plans, provided there are not
too many, will also have a beneficial effect if they are subject
to similar review and consultation.

Development Control

50. There is very little in the Green Paper
on development control that will achieve real step change. Tesco's
experience is that all of its applications are dealt with by local
planning authorities much more slowly than the current and proposed
targets. Handling targets for all planning applications to be
determined at each stage in the process need to be applied. Local
Planning Authorities, Government Offices, the Planning Inspectorate
and the Secretary of State should all be held accountable for
working within defined targets. It is Tesco's view that all applications
(including those determined by the Secretary of State) should
be determined within 12 months. This would compare with a typical
current period of 82 weeks for a Tesco superstore application.
See Annex1.

51. Strong Local Development Frameworks,
based on clear national guidance, should lead to high quality
development control, reducing the need for the Secretary of State
to call-in applications. This would be a significant improvement
from the present tendency of the Secretary of State, to call-in
proposals that are often only of local significance. For example,
cases have been called in on detailed points of design, the nature
of linkage to a town centre and the form of accessibility for
public transport.

Resources

52. Resources are fundamental to the operation
of the planning system. It is our experience that planning departments
are under resourced and this will continue to undermine the proposed
reforms of the system unless it is addressed. Tesco is prepared
to pay larger fees for major developments provided this would
demonstrably improve resourcing and capability.

Planning Obligations

53. Our view on tariffs is set out above.
Our proposals would enable certainty, public participation and
faster decisions. Tariffs will not. The planning system was not
designed to collect taxes to fund affordable housing. Giving planning
that role will be damaging and risks a major decline in development
as seen with the Development Land Tax

54. Tesco considers that, without significant
amendment and clarification, especially on handling targets, the
Government's reforms will not produce the expected benefits for
business or for others.

URBAN RENAISSANCE

55. If provided with sufficient resources
and a positive steer from national planning policy guidance, planning
can promote urban renaissance.

56. Tesco is actively playing a part in
urban renaissance. 90 per cent of Tesco stores are now built on
brownfield sites. Often decontamination has to be undertaken and
new infrastructure provided, including ways of providing access
for pedestrians and customers arriving on public transport. The
regeneration is not only physical. We have, to date, entered into
twelve partnerships with council training bodies and the voluntary
sector to deal with the issues around social exclusion. Hundreds
of long term unemployed people have jobs as a result. Tesco is
a developer that has a long-term relationship with the communities
it locates within.

57. Tesco believes it could do more but
has been thwarted by the weaknesses in the current planning system.
There are examples where carefully prepared schemes which are
consistent with local and national policy and are well supported
by local planning authorities and local communities, are nonetheless
called-in. The result is costly inquiries diverting resources
away from urban renaissance. This has dampened confidence in the
planning system for all parties including local communities. Proposed
stores at Batley, Brighouse, Clapham, and Warrington have all
been delayed to the detriment of local communities.

58. We are positive about reforming the
planning system and believe that, if it succeeds, urban renaissance
can accelerate.

59. We believe in evolution not revolution,
we strongly advise a pragmatic approach to reform and emphasise
the need to avoid unintended consequences arising from changes.
Too much change brings about uncertainty for developers who may
postpone or even cancel development as a result. This would thwart
urban renaissance.